- Legal Representation -

In order to establish an Official Committee of Equity Security Holders (OCESH), we need to have a motion filed in court, and to have that motion granted. Once an OCESH is in place, the legal fees will be paid by the estate (WMI).

Initially however, we will need legal representation for our group to file the motion. Such representation is expensive. From the several legal firms we have contacted, we have received quotes ranging from $50K to $500K. The higher cost quotes include hiring experts to give testimony about the potential value of WMI, especially the 'going concern' value.

Funding could come from some of the larger equity holders. As a last resort, we will have to collect donations to fund our legal expenses.

One option is to get a firm to represent us pro bono.

Another option is for one of our members to file the motion 'pro se'. Only an individual can file a motion 'pro se'. Any group or entity needs legal representation to file a motion.

We could collaborate with a legal firm to write the motion to lower costs, and have them file it.

At any rate, when you register your shares, please indicate how much you would be willing to donate for legal expenses.

All committee members are volunteering their time free of charge, and will not be paid by any donations that are made for legal costs. However, if you would like to make a donation for the administration of our group, there are links in the Forum.

The main points regarding reimbursement by the estate:

1. The same counsel that represents the Unofficial Committee would have to remain in place for the Official Committee.

2. An agreement to reimburse any fees paid by the Unofficial Committee, once the Committee becomes official would have to be in place and fully disclosed, and approved by the court.

3. If the court approves the retention of counsel nunc pro tunc (to a time when the Committee was Unofficial), counsel would be paid by the estate.

4.There could (would likely?) be opposition to such reimbursement by higher claims interests, and the court could agree.

Here is one attorney's response regarding OCESH funding:

If an Unofficial Committee comes into existence and pays it's counsel and that committee is ordered by the court to be the Official Committee and the same counsel that represented the Unofficial Committee is ordered to represent the Official Committee and fully discloses to the Court an agreement by that counsel to reimburse those who advanced the fees and expenses and provided an order is entered approving the reimbursement and Debtor either agrees to pay such reimbursement or is directed by the Court to make such payment and such payment is actually made and does not adversely affect counsel's post filing invoicing and right to be paid, most Courts should not have a problem approving such disclosed agreement.

However, opposition by Debtor or higher classes of debt or equity could successfully oppose such payment or reimbursement as a violation of the absolute priority rule and many courts could adopt such reasoning since such payment could be viewed as diverting a payment that should more properly be distributed to senior classes of claims or higher interests.

Official Committee counsel in the application to be retained and the order approving the retention normally will apply for retention nunc pro tunc to a date close in time to the date when services were first provided to ithe Unofficial Committee. However, this could also be opposed by representatives of higher claims interests.